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Searching Case Laws & Precedent on Legal Query.....!
Analysing the retrieved Case Laws
Scanned Judgements…!
Jurisdiction of CJM under Section 14 of SARFAESI - The CJM (Chief Judicial Magistrate) does not have jurisdiction to entertain or decide on applications under Section 14 of the SARFAESI Act. The primary role of the CJM or DM (District Magistrate) is to assist the secured creditor in taking possession of secured assets once the statutory conditions are satisfied. They are not required to give notices to borrowers or third parties, nor to adjudicate disputes or determine territorial jurisdiction in these proceedings. Instead, their function is to facilitate the secured creditor’s enforcement process, and any disputes or objections should be raised before the Debts Recovery Tribunal (DRT) ["Au Small Finance Bank vs Akhand Pratap Singh Yadav - Madhya Pradesh"], ["Au Small Finance Bank vs Tiwari Traders Kureela - Madhya Pradesh"], ["In The Matter Of Au Small Finance Bank vs Gurukripa Traders - Madhya Pradesh"], ["Yuvraj Singh vs The State Of Madhya Pradesh - 2023 Supreme(Online)(MP) 4017"], ["Punjab National Bank Through Its Authorized Representative Shri Pratap Singh vs The State Of Madhya Pradesh - Madhya Pradesh"], ["Bank of Baroda v. State of U.P. - Allahabad"].
Exceeding Jurisdiction and Procedural Errors - Several cases highlight that listing or proceeding with applications under Section 14 for registration or argument, without proper jurisdiction or adherence to statutory procedures, constitutes an overreach. For example, listing cases for argument on registration or adjudication by the CJM is contrary to the provisions of the SARFAESI Act. The courts have emphasized that the CJM or CMM (Chief Metropolitan/Magistrate) should only determine whether the secured assets fall within their territorial jurisdiction and then assist the secured creditor, without engaging in dispute adjudication ["Equitas Small Finance Bank Limited VS State of Madhya Pradesh - Madhya Pradesh"], ["Au Small Finance Bank vs Akhand Pratap Singh Yadav - Madhya Pradesh"], ["Au Small Finance Bank vs Tiwari Traders Kureela - Madhya Pradesh"], ["In The Matter Of Au Small Finance Bank vs Gurukripa Traders - Madhya Pradesh"], ["Yuvraj Singh vs The State Of Madhya Pradesh - 2023 Supreme(Online)(MP) 4017"], ["Punjab National Bank Through Its Authorized Representative Shri Pratap Singh vs The State Of Madhya Pradesh - Madhya Pradesh"], ["ASREC (INDIA) LIMITED vs JAYDEV MOTORS - Karnataka"].
Legal Principles and Supreme Court Judgments - The Supreme Court has clarified that proceedings under Section 14 are meant for the secured creditor to approach the CJM or DM for possession, not for dispute resolution. The borrower or third parties cannot object to proceedings under Section 14, and the courts must avoid hyper-technical approaches. Once statutory requirements are met, the role of the CJM is to facilitate possession, not to adjudicate rights or disputes ["Au Small Finance Bank vs Akhand Pratap Singh Yadav - Madhya Pradesh"], ["Au Small Finance Bank vs Tiwari Traders Kureela - Madhya Pradesh"], ["In The Matter Of Au Small Finance Bank vs Gurukripa Traders - Madhya Pradesh"], ["Yuvraj Singh vs The State Of Madhya Pradesh - 2023 Supreme(Online)(MP) 4017"], ["Punjab National Bank Through Its Authorized Representative Shri Pratap Singh vs The State Of Madhya Pradesh - Madhya Pradesh"], ["ASREC (INDIA) LIMITED vs JAYDEV MOTORS - Karnataka"].
Remedies and Proper Forum - When disputes or objections arise, the appropriate forum is the Debts Recovery Tribunal (DRT), not the criminal or civil courts. The courts have consistently held that any aggrieved party should raise objections under Section 17 of the SARFAESI Act before the DRT, and not attempt to challenge the proceedings in criminal courts or through writ petitions unless statutory provisions are violated ["Au Small Finance Bank vs Akhand Pratap Singh Yadav - Madhya Pradesh"], ["Au Small Finance Bank vs Tiwari Traders Kureela - Madhya Pradesh"], ["In The Matter Of Au Small Finance Bank vs Gurukripa Traders - Madhya Pradesh"], ["Yuvraj Singh vs The State Of Madhya Pradesh - 2023 Supreme(Online)(MP) 4017"], ["Punjab National Bank Through Its Authorized Representative Shri Pratap Singh vs The State Of Madhya Pradesh - Madhya Pradesh"], ["Bank of Baroda v. State of U.P. - Allahabad"], ["ASREC (INDIA) LIMITED vs JAYDEV MOTORS - Karnataka"].
Analysis and Conclusion:The collective case law and statutory provisions establish that the CJM's jurisdiction in SARFAESI proceedings is limited to assisting secured creditors in taking possession of assets once statutory conditions are satisfied. They are not empowered to entertain applications for registration, adjudicate disputes, or decide on territorial jurisdiction. Any attempt by the CJM or CMM to overstep these bounds is an abuse of jurisdiction and contrary to the legislative intent of the SARFAESI Act. Disputes or objections should be raised before the DRT under Section 17, ensuring that the enforcement process is streamlined and within the proper legal framework ["Equitas Small Finance Bank Limited VS State of Madhya Pradesh - Madhya Pradesh"], ["Au Small Finance Bank vs Akhand Pratap Singh Yadav - Madhya Pradesh"], ["Au Small Finance Bank vs Tiwari Traders Kureela - Madhya Pradesh"], ["In The Matter Of Au Small Finance Bank vs Gurukripa Traders - Madhya Pradesh"], ["Yuvraj Singh vs The State Of Madhya Pradesh - 2023 Supreme(Online)(MP) 4017"], ["Punjab National Bank Through Its Authorized Representative Shri Pratap Singh vs The State Of Madhya Pradesh - Madhya Pradesh"].
In the complex landscape of banking recovery laws in India, the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) plays a pivotal role. Banks and financial institutions often invoke this Act to recover dues from defaulting borrowers by taking possession of secured assets. However, a common question arises: CJM has no jurisdiction in third party petition in SARFAESI matter? This query highlights a critical jurisdictional limit under Section 14 of the Act.
If you're a third-party claimant, borrower, or secured creditor navigating SARFAESI proceedings, understanding the Chief Judicial Magistrate's (CJM) role is essential. This post breaks down the legal position, supported by judicial precedents, and guides you on appropriate forums. Note: This is general information, not specific legal advice. Consult a qualified lawyer for your case.
The SARFAESI Act empowers secured creditors to enforce security interests without court intervention in most cases. Section 14 specifically allows creditors to approach the CJM, Chief Metropolitan Magistrate (CMM), or District Magistrate (DM) for assistance in taking physical possession of secured assets.
However, the powers under Section 14 are ministerial and administrative, not judicial. As clarified in several judgments, the CJM's role is limited to facilitating possession, verifying basic compliances like jurisdiction and notice, without delving into disputes. Balkrishna Rama Tarle Dead Thr LRS VS Phoenix ARC Private Limited - 2023 2 Supreme 273 states, Powers exercisable by CMM/DM under Section 14 of SARFAESI Act are ministerial step – It cannot brook delay – It involves no adjudicatory process qua points raised by borrowers against secured creditor.
This distinction is crucial when third parties—such as tenants, subsequent purchasers, or other claimants—file petitions challenging the creditor's actions.
CJMs do not have the authority to entertain or adjudicate third-party petitions under Section 14. Their mandate is strictly to assist in possession, not to resolve ownership disputes, validity of mortgages, or third-party rights.
Key judicial findings include:- K. Arockiyaraj VS Chief Judicial Magistrate, Srivilliputhur, Virudhunagar District - 2013 0 Supreme(Mad) 3013 holds that Chief Judicial Magistrate has no jurisdiction to assist secured creditors in taking possession of secured assets in non-metropolitan areas. This extends to rejecting third-party petitions as they involve disputes beyond ministerial functions.- Federal Bank Limited vs Chief Judicial Magistrate, Kozhikode - 2025 Supreme(Online)(Ker) 45882 concludes that the CJM's functions under Section 14 are ministerial and do not involve adjudication, and that the borrower or third parties have to approach other forums like the Debts Recovery Tribunal for disputes or claims.
In essence, allowing CJMs to hear third-party claims would transform a speedy procedural mechanism into a full-fledged trial, defeating the Act's objective of expeditious debt recovery.
Courts have consistently emphasized the non-adjudicatory scope:
Third-party petitions typically question the secured asset's status, such as prior sales or tenancies. These require evidence and adjudication, which CJMs cannot provide. Federal Bank Limited vs Chief Judicial Magistrate, Kozhikode - 2025 Supreme(Online)(Ker) 45882 directs such parties to competent forums.
While some cases affirm CJM's general authority under Section 14 for possession assistance, they align with limits on adjudication:
Other sources highlight barred civil court jurisdiction under Section 34 SARFAESI, redirecting to Debts Recovery Tribunal (DRT). For instance, R. V. Homes (India) Pvt. Ltd. VS Housing Development Finance Corporation Ltd. - 2021 Supreme(Telangana) 408 explains Section 34 of the SARFAESI Act, the Civil Court has no jurisdiction to entertain the suit inasmuch as the proceedings under the SARFAESI, emphasizing remedies under Section 17 for 'any person' affected, including third parties.
Yogesh VS Chief Judicial Magistrate, Madurai stresses exhausting DRT remedies before writs: Exhaustion of alternate remedies under the SARFAESI Act before filing a writ petition under Article 226 of the Constitution of India is crucial.
These reinforce that CJMs handle assistance, while disputes go elsewhere.
If CJM rejects a third-party petition (as they must), consider:- Debts Recovery Tribunal (DRT): Primary forum under Section 17 for challenging possession measures. Open to borrowers, guarantors, and third parties. R. V. Homes (India) Pvt. Ltd. VS Housing Development Finance Corporation Ltd. - 2021 Supreme(Telangana) 408- DRAT (Appellate Tribunal): For appeals against DRT orders.- High Courts under Article 226/227: For writs, post-exhausting statutory remedies. Polly Chakraborty, W/o Dr. A. Chakraborty VS Chhattisgarh Rajya Sahkari Bank Maryadit - 2017 Supreme(Chh) 63 notes orders under Section 14(3) are amenable to writ jurisdiction, not sessions courts.- Civil Courts: Generally barred by Section 34, except in fraud cases with strong evidence. SARAF PROJECTS PRIVATE LTD. VS INDIAN OVERSEAS BANK - 2017 Supreme(Gau) 1302 cautions civil courts' ouster unless exceptional.
Typically, CJMs lack jurisdiction to entertain third-party petitions in SARFAESI matters under Section 14, as their role is purely assistive and ministerial. Judicial precedents like Balkrishna Rama Tarle Dead Thr LRS VS Phoenix ARC Private Limited - 2023 2 Supreme 273, K. Arockiyaraj VS Chief Judicial Magistrate, Srivilliputhur, Virudhunagar District - 2013 0 Supreme(Mad) 3013, and Federal Bank Limited vs Chief Judicial Magistrate, Kozhikode - 2025 Supreme(Online)(Ker) 45882 firmly establish this boundary, directing disputes to DRT or higher courts.
Key Takeaways:- CJM powers: Possession assistance only—no adjudication.- Third-party remedies: DRT (Section 17), writs (post-exhaustion).- Civil courts barred under Section 34.
Stay informed on evolving case law, and seek professional advice tailored to your situation for optimal outcomes in SARFAESI proceedings.
#SARFAESIAct, #CJMJurisdiction, #BankingLaw
The learned CJM, Khargone has neither registered the application nor taken any steps to proceed in the matter and in contravention to the provisions of section 14 of the SARFAESI Act, the CJM is listing the matter for arguments on registration. ... who has issued the list of cases u/S 14 of SARFAESI ACT pending before the CJM, Khargone annexed with the petition. ... (iv) DM/ADM/CJM acting under section 14 of the SARFAE....
ORDER notice under Section 13 of the SARFAESI Act, and when the debt was not paid, an application was filed before the CJM Tikamgarh under Section 14 of the SARFAESI Act. ... As held by the Apex Court that the borrower/guarantor has no right to object the proceedings under section 14 of the SARFESI Act, therefore, no notice is liable to be issued in this petition for remanding back the matter. 10. ... Under Section 14 of the SARFAESI Act, the secured creditor approaches the #HL_START....
ORDER notice under Section 13 of the SARFAESI Act, and when the debt was not paid, an application was filed before the CJM Mandsaur under Section 14 of the SARFAESI Act. ... As held by the Apex Court that the borrower/guarantor has no right to object the proceedings under section 14 of the SARFESI Act, therefore, no notice is liable to be issued in this petition for remanding back the matter. 10. ... Under Section 14 of the SARFAESI Act, the secured creditor approaches the ....
ORDER SARFAESI Act by issuing the notice under Section 13 of the SARFAESI Act, and when the debt was not paid, an application was filed before the CJM, Tikamgarh under Section 14 of the SARFAESI Act. ... Under Section 14 of the SARFAESI Act, the secured creditor approaches the CJM or DM for taking possession of secured assets, not for any adjudication of any dispute; hence, a hyper- technical approach should not have been adopted. ... At that stage, the CMM/DM is not required to adj....
Learned counsel appearing on behalf of the petitioners submits that the learned Magistrate erred in assuming jurisdiction under Section 14 of the SARFAESI Act. ... Learned counsel appearing on behalf of the State strongly opposes the challenge made to the jurisdiction of CJM or ACJM in passing an order under Section 14 of the said Act. ... Case No. 192 of 2025 under Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SAR....
Learned counsel appearing on behalf of the petitioners submits that the learned Magistrate erred in assuming jurisdiction under Section 14 of the SARFAESI Act. ... Learned counsel appearing on behalf of the State strongly opposes the challenge made to the jurisdiction of CJM or ACJM in passing an order under Section 14 of the said Act. ... Case No. 192 of 2025 under Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act , 2002 (SA....
Learned counsel appearing on behalf of the petitioner submits that the learned Magistrate erred in assuming jurisdiction under Section 14 of the SARFAESI Act. ... Case No. 37 of 2025 under Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). ... Learned counsel appearing on behalf of the State strongly opposes the challenge made to the jurisdiction of CJM or ACJM in passing an order under Section 14....
(iii) DM/ADM/CJM is not at all required to hear the application u/S 14 of the SARFAESI Act for the purpose of registration of the case. (iv) DM/ADM/CJM acting under Section 14 of the SARFAESI Act is not required to give notice either to the borrower or to the 3rd party. ... their territorial jurisdiction. ... The respondent no.1 has erred in misinterpreting the provisions of Section 14 of SARFAESI Act while rejecting application u/S 14 of the SARFAESI#HL_EN....
& Sessions Court, Mandleshwar to the CJM who has issued the list of cases u/S 14 of SARFAESI ACT pending before the CJM, Khargone annexed with the petition. Now the present petition is preferred. ... The learned CJM, Khargone has neither registered the application nor taken any steps to proceed in the matter and in contravention to the provisions of Section 14 of the SARFAESI Act, the CJM is listing the matter for....
(iii) DM/ADM/CJM is not at all required to hear the application u/S 14 of the SARFAESI Act for the purpose of registration of the case. (iv) DM/ADM/CJM acting under Section 14 of the SARFAESI Act is not required to give notice either to the borrower or to the 3rd party. ... The respondent no.1 exceeded its jurisdiction in deciding the rights of the parties while rejecting application u/S 14 of the SARFAESI Act. ... fall within their territorial jurisdiction#....
The plaintiff entered into agreement of sale in respect of the property already mortgaged. As per Section 34 of the SARFAESI Act, the Civil Court has no jurisdiction to entertain the suit inasmuch as the proceedings under the SARFAESI
Act for taking physical possession of the property before the first respondent. Subsequently, the second respondent filed a petition in Cr.M.P.No. 1524 of 2019 under Section 14 of the SARFAESI The third respondent availed loan from the second respondent Bank and committed default in repaying the loan amount, which necessitated the second respondent to initiate a proceeding under the SARFAESI Act.
(v) Whether the defendant is entitled special cost of Rs. 50,000/- from the plaintiff under the provisions of Section 35-A? Whether the court had no jurisdiction to hear and decide the suit in view of the provisions of Section 34 of the SARFAESI Act, 2002? (iv) Whether the suit of the plaintiff is barred by the provisions of the Specific Relief Act?
The trial Court has rejected the petition holding that the civil Court has no jurisdiction in view of section 34 of the SARFAESI Act. But while deciding the prima facie case, the learned trial Court failed to render its decision in respect of the prima facie case on the alleged facts or disputes of the parties involved in the case i.e. the matter of the fraud. No doubt, in respect of the matters covered by the SARFAESI Act, 2002, which the DRT is empowered to adjudicate, the civil Court's jurisdiction is ousted. However, the DRT constituted for specific purpose shall not ha....
8. Applying the law laid down by the Supreme Court in Harshad Govardhan Sondagar (supra) and in view of the provisions contained in Section 14 (3) of the SARFAESI Act, it is quite vivid that the order passed by the Chief Judicial Magistrate was only amenable to the jurisdiction of this Court under Article 226/227 of the Constitution of India as such, the learned Additional Sessions Judge has no jurisdiction and authority to entertain the revision petition against the order passed under Section 14 of the SARFAESI Act.
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